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Hanesbrands Inc HBI

Morningstar Rating
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Stock XNYS Rating as of
$4.80 −0.05 (1.03%)
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As of Delayed Price Pre-Open: $4.81 0.00
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Company Report

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Hanesbrands: Champion Sale Is Beneficial to Shareholders Despite Hit to Valuation

David Swartz

After months of speculation, Hanesbrands announced that it has agreed to sell Champion to Authentic Brands Group. The sale is an admission that Champion could not be revitalized without costly investment and it will reduce future cash flow generation. However, we also think it greatly reduces risk to equityholders as proceeds will be used for debt reduction. Moreover, the sale will allow management to focus on their core innerwear brands that provide Hanes with an intangible asset that supports our narrow moat rating, which is unchanged.

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Price vs Fair Value

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HBI is trading at a 852% premium.
Price
$4.80
Fair Value
$64.10
Uncertainty
Very High
1-Star Price
$12.92
5-Star Price
$2.30
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Champion’s poor results have hurt Hanes’ sales growth and profitability. The sale of the brand will allow management to focus on its core innerwear.

Bears

Hanes competes in very competitive categories with low barriers to entry. The competitiveness of the women’s intimates category especially has increased.

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Trading Information

Previous Close Price
$4.85
Day Range
$4.73–4.88
52-Week Range
$3.54–5.86
Bid/Ask
$4.80 / $4.82
Market Cap
$1.69 Bil
Volume/Avg
1,755 / 6.6 Mil

Key Statistics

Price/Earnings (Normalized)
48.11
Price/Sales
0.31
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Hanesbrands manufactures basic and athletic apparel under brands including Hanes, Playtex, Maidenform, Bali, Berlei, and Bonds. The company sells wholesale to discount, midmarket, and department store retailers as well as direct to consumers through stores and e-commerce. Hanesbrands is vertically integrated as it produces more than 70% of its products in company-controlled factories in more than three dozen nations. Hanesbrands distributes products in the Americas and Asia-Pacific. The company was founded in 1901 and is based in Winston-Salem, North Carolina.
Sector
Consumer Cyclical
Industry
Apparel Manufacturing
Stock Style Box
Small Value
Total Number of Employees
48,000
Website
https://www.hanes.com

Competitors

Valuation

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Metric
HBI
PVH
BBWI
Price/Earnings (Normalized)
 48.119.3411.48
Price/Book Value
 4.991.15—
Price/Sales
 0.310.691.17
Price/Cash Flow
 61.396.948.18
Price/Earnings
HBI
PVH
BBWI

Financial Strength

Metric
HBI
PVH
BBWI
Quick Ratio
 0.510.650.80
Current Ratio
 1.591.551.57
Interest Coverage
 0.889.614.04
Quick Ratio
HBI
PVH
BBWI

Profitability

Metric
HBI
PVH
BBWI
Return on Assets (Normalized)
 0.57%5.93%14.31%
Return on Equity (Normalized)
 9.87%13.11%—
Return on Invested Capital (Normalized)
 5.22%8.37%27.81%
Return on Assets
HBI
PVH
BBWI
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Apparel Manufacturing Industry Comparables

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1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Hennes & Mauritz AB Class B
HMRZF
—Pxjhlsn$25.0 Bil
 Hennes & Mauritz AB ADR
HNNMY
—Nmlgh$25.0 Bil
 Moncler SpA ADR
MONRY
—Yfsknyk$16.5 Bil
 Ralph Lauren Corp Class A
RL
NxlslnbjCnjvq$10.6 Bil
 Gildan Activewear Inc
GIL
NykqzxdZmyd$6.4 Bil
 PVH Corp
PVH
DhrhnkfsLqf$5.8 Bil
 VF Corp
VFC
ShdhzzkzxLbdvsfk$5.0 Bil
 Under Armour Inc Class A
UAA
ZqmkrzcdwPnyl$2.8 Bil
 Under Armour Inc Class C
UA
ChfhnywzhVxqxz$2.8 Bil

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